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June 1, 2026
Being a lump-sum entrepreneur does not mean zero paperwork. Here’s which documents Serbian paušal entrepreneurs must keep.
One of the biggest misconceptions among beginner entrepreneurs is the belief that lump-sum entrepreneurs (paušalci) do not need to keep any documentation. The truth is that administration and accounting are much simpler under the lump-sum tax system, but that does not free you from the obligation to keep certain records and track your revenue and turnover. So what documentation does a lump-sum entrepreneur actually need?
The first time you face a tax inspection or apply for certain banking services, you will need proper business documentation — even if you do not pay profit tax. As a lump-sum entrepreneur, you are not required to keep full accounting books, prepare balance sheets or calculate profits and losses in the traditional way. You are not even legally required to hire an accountant. However, you still must keep:
Why exactly these documents? Because they allow authorities — and you — to track cash flow and total revenue even without traditional accounting books.
Although lump-sum entrepreneurs are not required to maintain formal accounting ledgers or register every document officially, their documents still need to contain certain information. Every document issued by your business should include:
Invoices must also be properly numbered in chronological order. There is no legally prescribed numbering format, but the system must remain consistent and easy to follow. In practice, many entrepreneurs use formats such as:
invoice number / day-month-year.
If you are not registered for VAT, do not forget to include a note stating that VAT has not been charged under the relevant legal provision.
To make everything easier to manage, it is smart to create an archiving system from the beginning. This becomes especially important if you work with many clients, international customers or multiple payment platforms. The easiest approach is organizing documents by business year — and today, most entrepreneurs do this digitally. What once lived in physical binders can now simply live in folders on your computer.
If you work with companies — especially large corporations or the public sector — you may still be required to use Serbia’s electronic invoicing system (eFakture), even as a lump-sum entrepreneur. Many business owners mistakenly believe eInvoices apply only to VAT-registered companies, but the obligation also depends on who receives your invoice.
Additionally, if you receive payments through platforms such as PayPal, Stripe or Payoneer, it is extremely important to keep transaction confirmations, payment records and bank statements. Although these platforms generate some documentation automatically, you are still responsible for explaining the origin and purpose of every payment entering your business account.
Yes. Lump-sum entrepreneurs in Serbia are still required to maintain a KPO book (Knjiga o ostvarenom prometu — Book of Turnover Records). This is a record where all business income is entered by date.
For the state, the KPO book serves as proof that your business still operates within the legal limits for lump-sum taxation. For you, it is a financial overview of how your business is performing. Banks may also request it when you apply for loans, but it may additionally become necessary if:
It is important to update the KPO regularly. Retroactively filling it out can become a serious problem.
Business documentation should generally be kept for at least five years. This is considered best practice — not necessarily because every detail is legally prescribed, but because it is the safest way to operate. During those five years, entrepreneurs should preserve:
Without organized invoices, KPO records and clear payment trails, it can become extremely difficult to prove the origin of funds, justify turnover during tax inspections or demonstrate real income levels to banks. This can complicate:
In most cases, the real issue is not a single mistake — it is the absence of a clear and traceable business history.
